The Legislative Analyst's Office (LAO) compares the state budget for the coming fiscal year as proposed by the governor (May Revise), the state senate, and the assembly. The key difference between the legislature and the governor is that the legislative budgets assume there will be more revenue (and thus higher reserves) this year. The assembly version goes further than the senate's and adds more spending next year. Added spending includes an extra $75 million of which $50 million is for graduate medical education and $25 million is for deferred maintenance.

From the Mercury News: A group of former UC San Francisco information technology workers on Tuesday sued the state, claiming discrimination and harassment when they were forced to train lower-cost foreign workers to replace them.Thirteen former employees charge in a suit filed against the University of California Board of Regents that they were laid off because of their age, sex, race, or national origin. UCSF administrators eliminated about 100 IT positions in February, sending most of the responsibilities to Indian workers through a contract with HCL Technologies, an outsourcing firm. UCSF supervisors told the U.S. workers the layoffs would save the university $30 million over five years.UCSF is believed to be the first public university in the country to outsource a large number of IT jobs, a common practice in the private sector. Lawmakers criticized the UC system for replacing U.S. workers with foreign replacements.The criticism grew louder last month as state auditors discovered the UC Office of the President had tallied $175 million in undisclosed discretionary and restricted funds.Gary Gwilliam, attorney for the former employees, said the university mistreated the workers and misused the visa system in the process. The suit claims foreign workers on H-1B visas were brought in for the project, although the university has denied the charge.“This is not just outsourcing as usual,” he said. “These are public funds. I don’t think a university should outsource this.”In a statement, UCSF said IT costs have tripled between 2011 and 2016, largely due to the expansion of electronic medical records. “This growth rate is not sustainable,” it said.The university said its various missions — including medical research, quality care and serving poor communities — must be cost-conscious. The office of UC President Janet Napolitano did not return a request for comment.The suit, filed in Alameda County Superior Court, said workers were unfairly singled out for cost-cutting. All of the workers in the suit are over 40 years old and have decades of experience in information technology. One man worked at UCSF for 31 years, and several others worked at the university for more than a decade.UCSF administrators summoned IT workers to a meeting in July and announced it would be outsourcing about one-fifth of its work to HCL Industries. Administrators cut 97 positions, including 49 career employees, 30 contractors and 18 vacant jobs, according to the suit. The last of the laid off workers left UCSF at the end of February. "Many of the terminated employees were forced to go through the indignity of training their significantly younger, male HCL replacements, to enable them to perform the work in India,” the suit said.UCSF is one of 10 campuses in the California system, and offers graduate degrees in medicine and related fields. The medical center offers care to poor and under-served communities. UCSF has an annual budget of about $5.9 billion, and spends about two-thirds of its funds on salaries and benefits. Gwilliam said workers were outraged after hearing the office of the president — a department not directly related to UCSF — had collected a large surplus. “What’s going on here?” Gwilliam said. “It’s very disturbing.”

Tuesday, May 30, 2017

By Nanette Asimov and Melody Gutierrez, May 29, 2017, San Francisco Chronicle

The University of California will no longer pay for its governing board members to throw themselves dinners and parties after a Chronicle report showed that the regents regularly billed the university for their festivities.Although the events were charged to a private endowment, and thus not covered by public money or tuition, the practice will stop “to avoid any question over use of university or university-associated funds,” Board of Regents Chair Monica Lozano and UC President Janet Napolitano said in a statement Sunday.Longtime Regent Richard Blum, a wealthy financier and former chairman of the board, said the policy change was his idea. After reading The Chronicle’s story Sunday, Blum said he called Napolitano and suggested it.“I said, ‘Janet, it’s not worth the aggravation. Let’s have the regents pay for their own dinners,’” Blum told The Chronicle. “I just called Janet and said, ‘Look, for the amount of what it costs to have a dinner, let’s have everyone pay for their own dinner. And if they can’t pay, I’m happy to pick it up.’”The change in policy came hours after The Chronicle reported that the UC governing board billed the university for nearly a quarter of a million dollars since 2012 for dinners every two to three months.Some of the banquets were poorly timed: The $270-a-head Jan. 25 banquet was held the night before the regents voted to raise student tuition. And the similarly priced May 17 party happened a few hours after student protesters shut down the regents’ meeting, objecting to both the tuition increase and a $175 million secret fund uncovered by a state audit this year.The dinners were thrown at luxury destinations, such as San Francisco’s InterContinental Hotel and Palace Hotel. Attendees included the regents, their spouses, UC executives and campus chancellors.“Up to now, board dinners have been paid for with monies from the Searles Fund, a private endowment that the donor designated for university business costs not covered by state or tuition funds,” read the statement from Lozano and Napolitano. “However, to avoid any question over use of university or university-associated funds, regents will absorb their costs for board dinners from this point forward.”Revelations of the dinners came as the UC weathered blowback from the scathing audit — including calls by legislators to strip the university system of its independence from state government and Gov. Jerry Brown’s withholding of $50 million in funding if the university system didn’t fix financial problems identified by the review.Considering that the UC — with its 10 campuses, five hospitals and three national laboratories — has a budget around $30 billion, “it’s kind of silly” to be concerned with the price of dinners, Blum said. “But having said that, there’s the perception problem.”What’s more, Blum said, paying $250 or more per person — even for fine dining — was “crazy.” By comparison, periodic dinners at the Ritz-Carlton he has hosted for the American Himalayan Foundation, of which he is chairman, cost only $90, he said.Blum said he asked Napolitano to go through the numbers with him first thing Tuesday morning. He said he wasn’t sure whether the new plan would include the Wednesday night dinners the regents have when they gather every other month for the board meetings or whether it would only cover their celebratory dinners.A university spokeswoman did not return requests for comment Monday...

Monday, May 29, 2017

By Melody Gutierrez and Nanette Asimov, May 28, 2017, San Francisco Chronicle

The night before the University of California Board of Regents voted to raise student tuition to help cash-strapped campuses, they threw themselves a party at the luxury Intercontinental Hotel in San Francisco and billed the university. The tab for the Jan. 25 banquet: $17,600 for 65 people, or $270 a head. It wasn’t the only pricey dinner UC’s volunteer governing board put on for themselves at the university’s expense.Two weeks ago, on May 17, the regents threw a $15,199 party at San Francisco’s elegant Palace Hotel for 59 people — a $258-a-head event also billed to the university. Hours earlier, angry students shut down the regents meeting, shouting “greedy” in protest of the tuition increase and revelations by State Auditor Elaine Howle that the university president’s office kept $175 million in secret funds. The day after the party, regents defended UC President Janet Napolitano after Howle presented her audit — but agreed to her recommendations. Documents obtained by The Chronicle show that Napolitano’s office reimbursed the regents for more than $225,000 in dinner parties since 2012. During that period, the regents held four to six dinner parties a year for themselves, their spouses and other guests. Those dinners included:

• January 2016: A $13,600 retirement party for regents Fred Ruiz and Paul Wachter at the Palace Hotel. The regents office initially said 86 people attended the dinner, which The Chronicle reported earlier this month. Last week, the office acknowledged that had been the number of people invited to the party, and that 60 attended. The cost per person was $227.
• November 2014: An $8,800 dinner party thrown as the regents considered raising tuition by up to 28 percent over five years. The regents approved the tuition increase, which was later rescinded following negotiations between Napolitano and Gov. Jerry Brown.
• March 2013: The regents hosted a $15,600 dinner even as former UC President Mark Yudof said at that month’s meeting that UC was “working to weather the financial crisis.”

The parties shed light on the close relationship between Napolitano’s office and the board that oversees it: Napolitano’s office reimburses the regents’ expenses, and the regents approve the budget for Napolitano’s office. These parties also raise questions about the effectiveness of the regents’ spending policy. UC policy prohibits reimbursements for “entertainment expenses that are lavish or extravagant” and limits dinners to $81 a person.

The Chronicle first identified the high-priced regents dinners in documents obtained from the state auditor after Napolitano’s office came under fire last month for keeping secret funds and paying executives salaries much higher than similar positions at other universities or in government work. That audit questioned how well the 22 regents were doing their job overseeing Napolitano’s $686 million office, headquarters for the university system. Howle recommended that the Legislature take over the job, suggesting that would increase accountability.

Such an action would be unprecedented because, under the California Constitution, UC is an autonomous branch of government that the state has determined is “equal and coordinate” with the others. Assemblyman Phil Ting, D-San Francisco, who called for the audit and wants to bring Napolitano’s budget under legislative control, said the dinner parties help make his case. “I’m concerned they haven’t scaled these back,” Ting said.

Documents show that 16 regents attended the January dinner, including the student regent and the incoming student regent for next year, as well as campus chancellors, UC executives, spouses and others. Among the guests was regent and state community college Chancellor Eloy Ortiz Oakley, who said the $270-a-head retirement dinner “does sound high.” To be certain, though, he said he would have to compare it to the practices of other university boards. “But it’s certainly an area the board should look at and periodically review,” Oakley said. “We need to be able to articulate to the public that we’re being good fiscal agents.”

Another guest was Ralph Washington Jr., president of the UC Student Association and an incoming graduate student in public policy at UC Berkeley. Told how much the dinner cost, he said: “Oh my gosh, wow. That’s a surprise.”

“I don’t think any student would be happy to know about the amount of money used” on dinners, the student representative said, adding the regents should re-evaluate such decisions. “It is incumbent on those of us with the most positional power to make decisions from the perspective of those with the least.”

Like the other guests interviewed, Washington did not remember what was served. Also at the January dinner was Regent John A. Pérez, who told a reporter at the May 17 regents meeting: “I think we should pay for our own dinners.”

Pérez was one of four regents who voted against the tuition increase that is expected to raise $143 million next year. “We shouldn’t use money (for dinners) that could be used for students. Lavish meals are not the ‘highest, best’ use.” That night, the regents hosted the $258-per-person dinner at the Palace for Regent Monica Lozano, who is stepping down as chairwoman. How much the regents spend per person matters, said Regent Dick Blum, who had RSVP’d to attend the January dinner but could not recall if he went. “If it was $300 a person, that’s too high,” Blum told a reporter during the May regents’ meeting.

Critics say there are better uses for money bequeathed to the university. “This is money that could go toward scholarships,” said Jessica Levinson, a law professor and government ethics expert at Loyola Law School. “This rubs people the wrong way, including me.” On Jan. 26, the day after the party at the Intercontinental, the board voted 16-4 to increase tuition, saying they were “regrettably supporting” the hike because the university needed the money to ensure the system could maintain quality and access.

One of the retiring regents, Russell Gould, the state’s former finance director under Gov. Pete Wilson, said at the meeting that the university had done a good job of reducing costs and that the modest tuition increase was not done casually. “I think we have an obligation to protect this institution and to serve the students,” Gould said. The other retiring regent who’d been feted the night before was Eddie Island, who also approved the tuition increase.

Island declined to comment Friday. Gould did not return a call for comment. Assemblywoman Catharine Baker, R-San Ramon, said more information is needed about how the regents and Napolitano’s office are spending money. Baker has urged Assembly Speaker Anthony Rendon, D-Paramount (Los Angeles County), who is also a regent, to subpoena UC for detailed financial records that the auditor’s office said it never received. “This is potentially another example of why a subpoena is needed,” Baker said.

Saturday, May 27, 2017

The issue of lecturer Keith Fink's continued employment at UCLA has been simmering for some time, and tended to be picked up in conservative media as well as the Daily Bruin. Fink, a lawyer who teaches part-time in Communication Studies, has been involved in lawsuits involving high-profile Hollywood celebrities as well as the now-defunct American Apparel. Students have been protesting on his behalf. The story now appears in the LA Daily News:

Students and supporters of a UCLA adjunct professor are protesting what they say is pressure the university is putting on him because of his outspoken conservative politics. Keith Fink, a lawyer, has taught classes on free speech, contemporary issues, entertainment law and other subjects at UCLA for 10 years. He and student supporters said he may be dismissed from the school because administrators disagree with his views and practices, such as holding seminars on students’ rights and interviews he gave on Fox’s “Tucker Carlson Tonight” about his charge that UCLA is blocking students from taking his popular free speech course.“The administration doesn’t like what I have to say,” Fink said by phone Friday. “I also support students’ basic rights to due process and the school doesn’t like that. ... I show the students how their rights are violated. ... I don’t believe in trigger warnings. I don’t walk on eggshells. I don’t believe in safe spaces. I run against that current.”Fink, an adjunct professor at the university, said a recent shift in the leadership of the Communication Studies department, where he teaches, has led to pressure on him. He is undergoing a review process that he said could result in his dismissal and which UCLA said is routine for lecturers who have completed 18 quarters of teaching at the school. Fink said he didn’t accept a salary in his first years of teaching at UCLA, which is why, administrators told him, the review is taking place now rather than several years ago.About 25 students and supporters, carrying signs saying “Free speech is under attack” and “Keep your agenda out of our classroom,” gathered Friday on campus before bringing a list of demands to Laura Gómez, interim dean of UCLA College Division of Social Sciences which oversees the Communication Studies department, who wasn’t in her office when they delivered their list. Among the demands: that Fink be allowed to keep teaching and that the school implement curriculums “that increase intellectual tolerance” on campus.Mick Mathis, a senior at UCLA, said pressure on Fink is about curtailing free speech.“This is supposed to be a marketplace of ideas, and it’s not a marketplace of ideas if they’re trying to get rid of somebody with a contradictory viewpoint,” Mathis said.

...Several students in Fink’s class said they think Fink is being treated unfairly because he criticizes the administration. For instance, Fink has questioned Title IX officials’ qualifications and criticized the Office of Equity, Diversity and Inclusion...

...Dozens of UCLA students are frustrated with their inability to enroll in a communication studies class this quarter, despite receiving a permission-to-enroll number from their instructor. Keith Fink, a lecturer in the communication studies department, said his PTE numbers were not honored this quarter for Communication Studies 167: “Sex, Politics and Race: Free Speech on Campus.” He said he gave 41 paper and electronic PTE numbers total to students who attended his first class Jan. 11. The next day, he received several emails from students who were unenrolled from the course by the UCLA Registrar’s Office. He said the department does not agree with his conservative ideology and wants to restrict him from informing students of their rights. This is the first time he has been unable to enroll students with electronic and paper PTE numbers in a decade of teaching at UCLA...

“Authentic” professors are preferred by students, many of whom learn more from them as a result, according to a new study in Communication Education, the journal of the National Communication Association. The authors questioned some 300 college students on their perceptions of professors’ authentic and inauthentic behavior and communication, and found that authentic instructors were perceived as approachable, passionate, attentive, capable and knowledgeable. Inauthentic professors, meanwhile, were perceived as unapproachable, disrespectful, inattentive, lacking passion and not capable. Students also reported higher levels of learning and deeper understanding in learning experiences they described as authentic, and at-risk students are positively impacted by teachers whose communication is perceived as authentic, according to the study.

The paper says that that professors may work to seem more authentic -- only to the degree that it feels natural -- by conversing with students before and after class, and sharing experiences and really interacting with them as part of teaching. “‘Authentic’ Teachers Are Better at Engaging With Their Students” was written by Zac Johnson, assistant professor of communication at California State University at Fullerton, and Sara LaBelle, assistant professor of communication at Chapman University.

Instructors perceived as authentic were willing to share details about their lives, told personal stories, made jokes and admitted mistakes, according to the study. They also showed concern for their students as individuals, such as by emailing sick students to see how they were doing. “Our participants made it clear that a teacher’s efforts to view themselves and their students as individuals had a lasting impact,” Johnson and LaBelle say. “The process of teaching authentically need not be more complicated than making simple and direct statements regarding the level of concern and care that a teacher holds for their students. … Our implication is not simply that teachers should engage in limitless amounts of self-disclosure. Rather, by making efforts to engage with students beyond their expected roles in the classroom, teachers can greatly impact students’ perceptions of them and their course.”

Thursday, May 25, 2017

Researchers at the University of California (UC), Berkeley, have produced an artificial intelligence (AI) that is naturally curious. They tested it successfully by having it play Super Mario and VizDoom (a rudimentary 3-D shooter), as the video below shows.While the AI that was not equipped with the curiosity ‘upgrade’ banged into walls repeatedly, the curious AI explored its environment in order to learn more. Pulkit Agrawal, a Ph.D. student at UC Berkeley, a member of the team, compared it to babies, who “do all these random experiments, and you can think of that as a kind of curiosity.”Most current AIs are trained using ‘Reinforcement Learning’ — they are rewarded when they perform a task that helps them to reach a goal or complete a function. This is a useful and effective strategy for teaching AI to complete specific tasks — as shown by the AI who beat the AlphaGo world number one — but less useful when you want a machine to be autonomous and operate outside of direct commands. This is crucial step to integrating AI into the real world and having it solve real world problems because, as Agrawal says, “rewards in the real world are very sparse.”Brenden Lake, a Data Science Fellow at New York University said in an email to MIT that this work is encouraging. “Developing machines with similar qualities is an important step toward building machines that learn and think like people.”However, to some, this could be extremely worrying. Elon Musk and Stephen Hawking have already discussed AI as a serious threat to humanity, and we must consider the consequences of introducing improvements to thought capacity to a process of learning that we already don’t fully understand.

FRESNO, Calif. (AP) — A renowned strawberry researcher in California broke patent law and violated a loyalty pledge to his former university by taking his work with him to profit from it in a private company, a jury in San Francisco decided Wednesday.

Professor Douglas Shaw formed his own research firm with others after retiring from the University of California, Davis, where for years he had overseen the school's strawberry breeding program, developing a heartier and tastier fruit. Jurors in the federal court decided that he used seeds developed at UC Davis without gaining the university's permission.

The rift struck fear in some farmers in California, the No. 1 strawberry-growing state, that it would stymie research and cause them to lose their competitive edge. California last year produced 1.6 million tons of strawberries valued at roughly $2 billion, according to the U.S. Department of Agriculture. The university's strawberry breeding program is now under new leadership, providing farmers and consumers with new generations of the fruit, school officials said.

"This federal jury decision is good news for public strawberry breeders at UC Davis and all strawberry farmers throughout California and the world," said Helene Dillard, dean of the UC Davis College of Agriculture and Environmental Sciences.

After reading the verdicts, Judge Vince Chhabria, who oversaw the trial, scolded both sides, expressing doubt about the sincerity they claimed to have for the strawberry industry."If you really care about strawberries, and if you really cared about California's Strawberry Breeding Program, you would figure out a way... to avoid subjecting them to this custody battle," he said.

Shaw had first sued UC Davis after he retired, saying that the university unfairly destroyed some of his work and keeps some of his other research locked in a freezer, depriving the world of a better strawberry. He had sought $45 million for lost research. The university countersued.

Shaw, 63, is a giant in the strawberry world, heading the university's lucrative breeding program for more than two decades alongside plant biologist Kirk Larson. Most of California's strawberry farmers grow plants developed by Shaw and Larson. The two men developed 24 new varieties, allowing growers to double the amount of strawberries produced while retaining the fruit's succulence. They created strawberries that were more pest- and disease-resistant, more durable during long-distance travel and capable of growing during the shorter days of spring and fall.

The partners say their work netted the university $100 million in royalties. How much they themselves made at UC Davis is unclear, but they say they contributed more than $9 million of their own royalties toward the university's breeding program. They retired from the university in 2014 because, they said, the school was winding down the program. Working in partnership with growers and nurseries, they launched a business called California Berry Cultivars, based in Watsonville, to develop new strawberry varieties.

Attorney Sharyl Reisman, who represents the professors and the California Berry Cultivars, said that despite the disappointing verdict, her clients wish to find a way to collaborate with the university.Damages the professors owe in the case will be decided later, the judge said.*

A.G. Kawamura, a strawberry farmer, former California agriculture secretary and part owner of the California Berry Cultivars, said the judge's comments signal a need for much more work to settle the dispute, even after the trial.

"We still believe there's good reason to hope for a collaborative progress for all parties to move our strawberry industry forward without litigation," Kawamura said. "We are still committed to being an important part of the California strawberry industry.*

Lest you think - from our prior post - that the dysfunction in the legislature is only on the GOP side, Democratic efforts to kill the constitutional autonomy of UC continue:

..."It’s long overdue that the citizens of California impose more constraints on UC’s $32.5 billion budget. When the California Constitution was ratified in 1879, UC was deemed a 'public trust.' Its governing board enjoys almost complete autonomy in how it operates. To rein in the excessive spending and administrative inflation, I am authoring State Constitutional Amendment 13, a bill that will amend the state Constitution and force a recalcitrant UC to stick to a new budgetary constraint: No tuition increases can be implemented if the number of administrators making a salary above that paid to the governor exceeds 600. Right now, UC has 112 well-paid administrators beyond that ceiling..."

The LA Daily News picks up the state audit report story in an editorial and calls for a subpoena after hearing from some GOP legislators. Excerpt:

"A group of Assembly Republicans has called on Speaker Anthony Rendon, D-South Gate, to issue a legislative subpoena to compel the University of California to produce all financial records and correspondences pertaining to the $175 million fund. Rendon has declined to do so."
But subpoena what? UC and the state auditor seem to have an agreement over the next steps to be taken. So as far as a subpoena is concerned, there is no there there. The state auditor in fact has the legal authority to get whatever records she wants.

Apparently, the editorial board of the LA Daily News didn't watch or listen to the recent Regents meeting at which the state auditor reported, discussion ensued, and steps were taken. The GOP is marginalized in the legislature with the Democrats now having supermajority status, so it's understandable - as a matter of politics - that Republican legislators are hanging on to this issue. And gone are the days when Republicans, such as former Gov. George Deukmejian, actually liked UC,which they saw as contributing to economic growth in California. But the LADN editorial board might have consulted members of the Regents - including Republican appointees - before writing.

Wednesday, May 24, 2017

We conclude our collection of audios of the May 2017 Regents meetings with links to the afternoon sessions of May 17.Three committees met in the afternoon. Below is a summary of the agendas:

Agenda – Open Session:
Public Engagement & Development

Action: Approval of the Minutes of the Meeting of March 15,
2017

Discussion University of California Alumni Relations
Overview

Discussion Community Outreach and Impacts, Los Angeles
Campus

Discussion Overview of the Federal Budget and Its Impact on
the University of California

Discussion State Government Relations Update

----

Agenda – Open Session:
Compliance and Audit

Action: Approval of the Minutes of the Meeting of March 15,
2017

Discussion: Draft Internal Audit Plan for 2017-18

Discussion: Compliance Risk Assessment Process Update

----

Agenda – Open Session:
Governance & Compensation

Action: Approval of the Minutes of the Meeting of March 15,
2017

Action: Approval of Appointment of and Compensation Using
Non-State Funds for Senior Managing Director, Office of the Chief Investment
Officer as Discussed in Closed Session

Action: Recommendations for Election of Officers and
Appointments to Standing Committees and Subcommittees for 2017-18

Below is a link to Governance & Compensation. There was push-back by some Regents over approval of the big buck salary on the agenda until after the full board had discussed the state audit the following day:

Back in 1978, voters passed Prop 13 which drastically cut local property taxes (and thus indirectly pushed responsibility for local services, especially K-14, to the state.) A year later, still in an anti-tax mood, voters enacted Prop 4 which placed a limit on spending based on a formula. That formula's impact was significantly reduced by a later proposition but it's still on the books and the state is now bumping against it. The governor's interpretation of what the limit is, embedded in his budget proposal, differs from what the LAO and others believe. So there is yet another constraint on the state budget:

John Myers LA Times 5-23-17Lawmakers from both sides of the aisle raised concerns Tuesday that Gov. Jerry Brown’s state budget plan relies on a faulty calculation of a spending limit imposed by voters in 1979.“This is really a big deal,” state Sen. Jim Nielsen (R-Gerber) said during a meeting of the Senate’s budget committee.At issue is how to interpret a 38-year-old state appropriations limit that, if breached, would require excess revenues to go to schools or be paid to taxpayers as rebates.An April 28 opinion from the legislative counsel of California, released publicly Tuesday, said that certain appropriations that Brown's budget looks to exclude from the spending limit "must be included" per the language that voters placed in the California Constitution.That opinion aligns with a March report by the independent Legislative Analyst’s Office, which criticized Brown’s plan to exclude $22 billion in state spending from counting under what’s known in Sacramento as the Gann limit, named in honor of its author, the late anti-tax activist Paul Gann.Advisors to Brown told state senators during the budget hearing that they believed the spending limit had been misinterpreted in the past and were simply trying to realign it with the law.The otherwise arcane issue is of importance because the interpretation by the Legislature’s analysts could force some $1.8 billion in lower spending — which could then trigger unexpected cuts in a variety of programs even as tax revenues are generally outpacing projections.The committee ultimately went along with Brown's framework, though the topic may come up again before a final spending plan is ratified next month.“I have to say I’m concerned,” said state Sen. Richard Roth (D-Riverside) after asking a series of detailed questions about the impact to the state's finances if the legal spending limit is breached.Whether lawmakers ultimately agree to Brown’s interpretation may not be the last word on the issue, as the law makes clear that California courts could impose a final interpretation.

Our previous post noted the UC prez's concerns about federal budget issues. One issue only tangentially mentioned was federal health expenditures under "Obamacare." Of course, UC hospitals would potentially lose revenue to the extent that funds for Medi-Cal are reduced. But there is a larger effect over the long term.

Back in the day when the Master Plan (with its promise of free tuition) was developed, the state's expenditures for Medi-Cal (Medicaid) were zero - since the program didn't exist.

Under Obamacare, the state expanded the number of people covered by Medi-Cal substantially, with federal budgetary support. To the extent that such support goes away or is reduced, the state will either have to fund the Medi-Cal expansion on its own, i.e., out of general fund revenue, or reduce coverage. So there will be direct competition for funding between UC and Medi-Cal. Of course, any economic downturn would greatly increase that competition. Already, concerns about the future of Medi-Cal funding are being expressed. Example:California will contribute about $1.3 billion to its Medi-Cal expansion this year, a new expenditure that will further strain an already burdened health care budget. This year marks the first time states that expanded Medicaid under the Affordable Care Act will have to pitch in to help fund their expansion of the program. Their share of the overall price tag compared with federal contributions is small – 5 percent of the cost to cover newly eligible enrollees – but that still equates to real money in the Golden State. That’s because the expansion of Medi-Cal, California’s version of the federal Medicaid program for low-income residents, has added nearly 4 million additional enrollees, according to the state Department of Health Care Services (DHCS). Most other states don’t have that many enrollees in their entire Medicaid programs...

University of California President Janet Napolitano today (May 23) issued the following statement on President Trump's proposed fiscal 2018 budget:While many voices have been raised against President Trump's proposed budget for the upcoming fiscal year, I would like to concentrate on what such drastic cuts in federal support would mean for the University of California and public higher education throughout the country.As president of the nation’s largest public research university, I urge Congress to immediately begin work on a revised budget proposal that makes meaningful investments to help our students, protect our patients and keep America's research enterprise preeminent.The University of California currently receives more than $8 billion in federal support, including over $3 billion for our research enterprise, $1.6 billion in student financial aid and $3.1 billion in patient care support.With the proposed budget's drastic cuts to the National Institutes of Health, for example, UC researchers might never have accomplished such medical breakthroughs as the bioartificial kidney for the treatment of end-stage renal disease, or the drug XTANDI to treat prostate cancer. Likewise, proposed cuts to the National Science Foundation and energy science programs could slow vital UC research that mitigates the effects of climate change and helps solve many of the greatest scientific challenges that our country, and the world, confront.More than 133,000 UC students benefit from federal financial support to pursue their education. The proposed cuts to student financial aid programs would limit their access to higher education and increase student debt.The proposal to slash more than $800 billion over 10 years from the Medicaid program would be devastating, not only to patients and hospitals in California, but to those throughout the nation. This cut would make it increasingly difficult for UC health centers to continue to treat the sickest patients and serve as vital safety nets to vulnerable populations.The fight now moves to Congress where we must work with our elected representatives to make wise decisions and better investments to protect students, grow our research enterprise and expand healthcare services.

Tuesday, May 23, 2017

State senator to introduce a constitutional amendment to limit UC's 138-year-old autonomy

Teresa Watanabe, LA Times, 5-23-17 The University of California, under fire for controversial budget practices, would lose the autonomy it has enjoyed for 138 years under a state constitutional amendment proposed Tuesday.The amendment suggested by state Sen. Ed Hernandez (D-Azusa) would give the Legislature the power to directly fund the UC Office of the President, which is currently supported by campus fees. Such legislative control was recommended in a recent state audit, which found that central administrators in the office failed to disclose a $175 million surplus, did not adequately justify spending on presidential initiatives and paid unusually generous salaries. UC disputed some findings but has agreed to the audit’s 33 recommended reforms.The bill faces tough odds. First, it would have to pass the Legislature, which has rebuffed two previous attempts in recent years to limit UC’s autonomy. Second, voters would have to agree to amend the Constitution.Hernandez acknowledged this but said, “We need to have a real conversation about how do we make the regents accountable to the students of California. This constitutional amendment is the start of that conversation.”To broaden representation on the UC Board of Regents, the bill would expand membership and voting rights to the California Community Colleges chancellor, three more students, two faculty members and a staff member. Regents’ terms would be reduced from 12 years to four — although reappointment to as many as three terms would be possible. The UC president would lose voting rights and become a non-voting regent.Hernandez said too many regents were out of touch. “Some of them don’t know what it is to be a struggling student,” he said.Several regents have spoken out against direct legislative control of UC, saying that it was under an autonomous board that the 10-campus system developed into the nation’s top public research university.UC received its autonomy under an 1879 revision of the California Constitution — a “watershed moment,” according to a 2015 analysis by John Aubrey Douglass, a UC Berkeley senior research fellow, — which allowed it to create an academic culture and public mission “relatively free of the often contentious political interventions found in many other states.”Regent John A. Pérez, a former Assembly speaker, said concerns over UC budget practices were legitimate but should be addressed by regents rather than legislators.“The level of depth that’s required to right-size this and to deal with the complexity is appropriately, both constitutionally and functionally, with this board,” he said at the regents meeting last week.

Monday, May 22, 2017

Gov. Jerry Brown’s latest budget proposal calls for withholding $50 million from the University of California until the UC improves its financial accountability and admits more community college transfers. It’s his way of pushing for change despite the UC’s constitutional independence.But the governor has a far more effective tool to overhaul the UC that he has yet to take full advantage of: He could reshape the Board of Regents by filling its four current vacancies.“I think it would be a game-changer if the governor filled the remaining four vacancies with people who were ready to roll up their sleeves and try to approach their love of the university through improving it – not just through defending what it is at the moment,” says Regent and former Assembly Speaker John Pérez, whom Brown appointed in 2014.And when asked after Thursday’s board meeting if he’d like to see the governor appoint four regents to the four vacancies that would hold the president’s office more accountable, Regent and current Assembly Speaker Anthony Rendon replied, “Absolutely.”The anger and frustration from the state Capitol toward the University of California is bipartisan. A state audit last month blasted the president’s office for a lack of financial transparency, just weeks after UC regents voted to raise tuition. Lawmakers have also pushed the UC to admit more in-state students and cut costs in the president’s office.“Absolutely, we want to ensure there’s greater accountability,” says Board Chair Monica Lozano. “But that can’t be the only criteria. (The UC) is a very complex institution.”The governor appoints 18 of the 26 board members. The others are elected officials, the UC president, two alumni and a student.Lozano says regents already exercise strong oversight of the president’s office, and are taking more action in light of the audit’s findings. But, she adds, there’s good reason for the UC’s constitutional independence – and the audit shouldn’t lead to an overreaction.“It’s difficult to look at a snapshot of what is a very complex set of factors and think that because of this one moment, you have to move the spectrum to a particular end,” Lozano says.Brown’s office says it’s taking the time it needs to find the best people to serve – especially because regents serve 12-year terms.

As promised, we provide below a link to the full audio of the Regents meeting of May 18th. The main issue of focus of the four and a half hour session was the state audit.

The Daily Bruin provided a summary:

The governing board of the University of California met for the last day of its bimonthly board meeting at UC San Francisco on Thursday. The Board of Regents heard details about the state’s audit of the UC Office of the President, discussed UCOP’s budget and approved a cap on nonresident student enrollment. Ex officio regents Anthony Rendon, speaker of the assembly, and Tom Torlakson, state superintendent of public instruction, attended the meeting.

Board of Regents

State Auditor Elaine Howle presented the results of her office’s audit of UCOP. She emphasized the audit aimed to look at UCOP’s protocols and procedures, not critique UC President Janet Napolitano’s leadership.

Howle also expressed concerns about UCOP’s schedule for implementing the audit’s recommendations. The audit recommended a three-year plan, starting April 2018, to begin implementing changes to align with the state’s legislative and budget cycle. However, UCOP had asked to begin implementing them by July 2018, which Howle said she thought was unreasonable.

Howle said the audit had difficulty measuring the cost of systemwide UCOP and the number of services campuses are actually using. She added she was concerned by UCOP’s interference with her attempts to conduct confidential surveys with individual campuses. The regents approved hiring an independent third party to investigate UCOP’s alleged interference May 11.

She also said she hopes regents will hold public meetings to discuss people’s opinions on systemwide initiatives and will continue overseeing UCOP.

Rachael Nava, UC chief operating officer and head of the task force in charge of implementing the audit’s recommendations, laid out UCOP’s plans for implementation, including changing budget practices. She said UCOP will now separately display past funds and provide reserve balances.

Regent Monica Lozano, chair of the board, said the recommendations were not just about complying, but changing the institutional culture of UCOP.

The regents voted to authorize a budget for UCOP for the 2017-2018 fiscal year, but the Finance and Capital Strategies Committee will review it in depth before the regents vote to confirm increased funding for certain programs at the July meeting.

The board also approved actions the committees voted on during Wednesday’s meeting.

With all the fuss about the state audit, one might have thought that the auditor would have focused on where the big bucks that the Regents oversee are. Consider the headline number that triggered the brouhaha that there was a "hidden reserve" in UCOP of $175 million that the Regents didn't know about, or have the ability to make policy about. UCOP, of course, disputes that number and says the "true" reserve is under $40 million. But consider the capital expenditures the Regents routinely approve, based on campus requests that are blessed by UCOP. The UCLA Grand Hotel involved an expenditure of over $150 milllion, and that was just one project!

In the course of a year, the Regents approve vast sums involved in capital projects without any built-in capacity to evaluate them. They approve projects basically on the say-so of the campuses and UCOP. If a member of the Board of Regents happens to have some professional experience in real estate, that's at best a lucky happenstance. Even when questions are raised, the campus typically comes back with the same project with some tinkering and eventually it is approved. The Regents have no independent capacity to evaluate capital expenditures.

Usually, there is some assurance by the campus and UCOP that a particular project will be built without state money so not to worry. The proposition seems to be that non-state funds have no opportunity cost which is dubious on its face. Moreover, it neglects the fact that if the project ends up costing more than expected, or its "business plan" fails, or outside fundraising proves to be inadequate, the costs will eventually have to be met by state funds and/or student fees of one kind or another.

Sunday, May 21, 2017

We continue our catching up with the Regents by skipping to the May 18 session. We have already posted audio of May 16 and the morning of May 17. We'll come back to the afternoon of May 17 and the full May 18 session in a later post. In the meantime, below is a video of what California State Auditor presented to the Regents as a summary of her earlier report. Her comments were followed by discussion of the report which UCOP has promised to implement. The report dealt with reserve funds, various initiatives by UCOP, and seeming interference by UCOP with the auditor's survey of the campuses of their evaluation of UCOP's services.

Now available are the audio recordings of the meetings the Regents held on the morning of May 17, 2017.

The audios are preserved by this blog indefinitely because the Regents delete their recordings after one year. Under the revised format for Regents meetings, committees meet simultaneously in different rooms. On the morning of May 17, there was a full board meeting and then meetings of three committees. Academic and Student Affairs and then National Labs met in one room. In another room, Finance and Capital Strategies met. Here is a direct link to Academic and Student Affairs and National Labs:

The University of California Board of Regents, governing board of the UC, met at UC San Francisco for its bimonthly board meeting. The board discussed student housing, transfer student enrollment and the state budget.

Students and union workers disrupted the beginning of the meeting for about 15 minutes, chanting, “Whose university? Our university” in protest of the UC’s alleged nondisclosure of $175 million and generous salaries, which a state audit revealed in April.

Aimée Dorr, UC Office of the President provost and executive vice president for academic affairs, talked about implementing a one-year independent residency policy to replace the current two-year requirement. Regents also discussed how a student’s residency could impact their admission and encouraged implementing a UC policy that aligns with state laws.

Robin Holmes-Sullivan, vice president of student affairs, said that selected UC campuses will reach the goal of accepting one transfer student for every two freshmen by the end of next year.

Chancellor Gene Block said UCLA has been consistent with the two-to-one ratio since 2003. Block added UCLA achieved the admission ratio through approaching more transfer students by assigning staff members to work with community colleges in California.

UC Riverside Chancellor Kim Wilcox said how close a UC campus is to a community college is an important factor for transfer applicants, and thinks the UC should reach out to more transfer applicants so they have more incentives to apply. Wilcox added the UC could achieve the two-to-one ratio by reducing the number of freshman admissions.

Finance and Capital Strategies Committee

The committee approved budgets and designs for several new buildings at UC San Francisco and the renovation of the UCLA graduate art studio on Warner Drive.

The committee also approved funding to help UCLA explore the potential of five housing sites discussed at the March meeting. Regent Hadi Makarechian suggested condensing housing options because land is expensive in Westwood. Steve Olsen, UCLA vice chancellor and chief financial officer said the campus aims to house 60 percent of undergraduate students.

Nathan Brostrom, UCOP executive vice president and chief financial officer, updated the committee on UC President Janet Napolitano’s student housing initiative. He added the UC’s proportion of students housed on campus is lower than the proportions of private universities but higher than those of many public universities. He said campuses have added about 18,000 beds from 2006-2016.

From time to time, we have noted this litigation which seems to go on without end. If any legal beagles want to provide an interpretation, we would welcome it.

SAN FRANCISCO (CN) – Attorneys for the University of California, Davis, torpedoed its former researchers’ main arguments during day 4 of a contentious trial over who gets the right to breed multimillion-dollar California strawberries, raising questions as to how a federal jury will decide the case.

Former UC Davis researchers Doug Shaw and Kirk Larson ran the university’s world-renowned strawberry-breeding program until they retired in 2014. They say the school rejected their proposal to form a private breeding company once they retired that would license the strawberry plants they invented, develop new varieties from them, and pay the school royalties.

Shaw and Larson, who along with their company California Berry Cultivars (CBC) are cross-complainants in the case, claim that “powerful farming conglomerates” had the California Strawberry Commission pressure UC Davis to deny Shaw a license, by suing the school to keep the breeding program open once Shaw and Larson retired. Then, they say, the school froze CBC’s ability to work with the plants by filing a single patent application on 168 of the most valuable varieties they invented at the school – a move the U.S. Patent and Trademark Office called “inappropriate.”

The school, however, claims Shaw and Larson used its plants to develop new ones despite its denial of the license, and sued them and CBC in 2016 for violating nine patents on its most successful strawberries.

California strawberries generate $2.5 billion a year and are the state’s fifth most valuable crop. UC Davis’s agriculture school has developed 56 varieties since 1945, creating strains that are bigger, taste better, stay fresh longer and yield up to six times more per acre.

Shaw and Larson developed more than a dozen strawberry varieties at UC Davis that are grown throughout the world, and most of the strawberries currently eaten in California were invented by them. In 2004, they released the Albion variety, known for its sweetness and high yield. It can be grown as many as nine months out of the year and is the most widely planted strawberry in California.

Although Shaw and Larson’s attorneys have argued throughout the week-long trial that the California Strawberry Commission nixed the license, it was only on Friday that they presented testimony to support their contention.

“We felt we were making a lot of progress,” farmer Jane Fujishige testified on Friday about a meeting between CBC and the California Strawberry Commission over the commission’s lawsuit against UC Davis. Fujishige Farms, which is owned by Fujishige’s family, is a member of CBC. “Then they said we would not settle, that the whole purpose of the suit was to prevent Shaw from breeding again.”

Fujishige didn’t explain her explosive statement, nor did defendants’ counsel ask her to elaborate. On cross-examination, Fujishige acknowledged the university had continued to negotiate with Shaw for a license even after the strawberry commission filed its lawsuit against UC Davis. She also confirmed that some of CBC’s own members are members of the strawberry commission.

According to Dellaporta, a professor in Yale’s molecular, cellular and developmental biology department, CBC’s seedlings contained genetic material from five university-patented varieties that hadn’t been released at the time they were bred, and 19 that had never been released.

UC Davis claims that in 2010, Shaw and Larson began sending certain varieties from its strawberry program to EuroSemillas, a company in Spain that was a founder of CBC and a contractor for the university’s program, for breeding.

The school says Shaw and Larsen bred the seeds outside the United States because they knew they couldn’t do so here without violating U.S. patent laws.

Under agreements between UC Davis and EuroSemillas, the plants can be tested in Spain before going to market, but they cannot be used for breeding. However, the university says EuroSemillas harvested the seeds of the mother plants in Spain, and that CBC sent the seeds to the United States for use.

Attempting to cast doubt over Dellaporta’s results, Shaw and Larson’s attorneys suggested Shaw didn’t know that university-patented varieties had been used in the crosses – a suggestion U.S. District Judge Vince Chhabria told them to “move on” from – and that Dellaporta hadn’t actually observed CBC’s plants to see whether they shared physical traits with the university’s plants.

“The DNA is the most accurate method to determine,” Dellaporta countered. “There’s no question about that.”

UC Davis is represented by Rachel Krevans with Morrison & Foerster in San Francisco, and Shaw and Larson by Greg Lanier of Jones Day, also in San Francisco.

The Legislative Analyst's Office (LAO) continues to project more resources in the state budget than the governor projects:

...Our office assumes 2017-18 would end with $12.1 billion in budget reserves — about $2 billion higher than the administration’s estimate... The difference is the product of two factors. Compared to the administration: (1) our office estimates the state will end 2016-17 with about $1 billion more in revenue and (2) our office’s estimate of state General Fund spending on schools and community colleges is nearly $800 million lower in 2017-18...

Saturday, May 20, 2017

We have cautioned that it will take a bit of time to catch up with all the Regents recordings from last week. Fear not. Progress is being made. But one thing that has been noteworthy about all the reactions to the state audit report is that faculty input and voices seem to have been largely absent. However, the faculty rep to the Regents did have something to say about that issue and other related concerns. Below is what he said:

This issue shouldn't affect many folks except for workaholics in the office on Sunday morning. Nonetheless, here is the warning:

For those of you coming to campus this Sunday, May 21st, please be advised of a number of road closures on campus between 8AM – 10AM because of the Walk to Cure Arthritis which starts and ends on Wilson Plaza.

The following road closures will be in effect from 8am until 10am on Sunday, May 21: